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The number of people approved for a mortgage surged by a third last month, driven largely by first-time buyers. And potential buyers are getting approved for higher amounts of borrowings, according to the figures from the Banking and Payments Federation. The figures imply property prices will keep rising, economists said.

A total of 4,124 want-to-be buyers got approval during May, the banks said. In the same month last year there were 3,046 approvals, which means the total was up 34.5pc in a year.

The approvals in May were valued at €884m in total. The average purchase approval in May was €228,505, up 7.7pc year-on-year.

First-time buyer approval totals increased by 46pc in the year to 2,148. The average first-time buyer approval was up 10pc to €208,389.

Analyst with Davy Stockbrokers David McNamara said the data signals further strong growth in house prices in the coming months. The rise in the numbers getting the go-ahead for home loans comes as the Government has committed to reviewing the help-to-buy scheme.